Instilled by his mother’s generosity to wards poor, Md.Yunus, the son of prosperous gold smith has learned the sense of duty to the poor. It across all cultures and civilization Yunus and Grameen bank have shown the path that even the poorest of the poor can work to bring about their own development. The success of Grameen Bank has inspired many imitators, and encouraged commercial banks in many developing countries to take up micro credit lending as well. Though it is not first time the Nobel prize committee has chosen to honor economic development as contribution to world peace, rather than the more usual diplomacy or rights advocacy, it is the first time the prize has been awarded to a profit making business. The selection seemed to embody two connected ideas that are gaining ground among the development experts; that attacking poverty is essential to peace, and that private enterprise is essential to attacking poverty.
His success is based on idea of micro-credit policy.
But what does it means and how does it work?Credit is really another name for borrowing. Business house borrow money to grow their businesses, and create goods and services. Individual borrow to buy or spent on goods/services.
Credit is really a form of Investment in economic growth of the society. If a country has low saving rate, they have to borrow from foreigners or get them to save in their country. Obviously all these works better in a developed country with resources and established markets to capitalized on growth. In developed countries investments happens on a macro or large scale. But for the less developed countries like ours it does not work properly. After war-II Europe borrows money from US to rebuild it self, and the rebuilding on a macro scale: roads, factories, infrastructure etc.
But whether this works on poverty stricken countries like ours/Bangladesh: Micro credit is the alternative path for development in less developed countries (LDC’s) as Md. Yunus finds out. Micro credit makes small loans to mostly women in severely economically depressed economics. An anecdote from Yunus probably answers question best. He taught macroeconomics in Bangladesh University. But every day he would see in the local village abject poverty that negated the means to growth he lectured about. One such day he gave a women 2USD. Now rather than get leather from someone, who told her what shoes to make and then would sell them for her when she was done, she could buy leather herself, make shoes and sell them. She would be able to repay the loan and buy more leather to continue the cycle of growth. From this idea a bank was built: It creates economic growth through small development of goods and services. Each loan recipient Receives a small capital stake with which to create a good for sale. The sale of good makes it possible to repay the loan amount and buy more materials to make more goods.
He founded the bank to lend small amount of cash–often as little As $20(Bangla taka 1370/-) to local people, almost always women who could use it to found or sustain a small business by say, buying a cow to sell milk or simple sewing machine to make clothing.
DILIP GUHA
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